The Wealth Of Nations By John Maynard Keynes

The initial movement of economic liberalism can be dated back to the era of the Enlightenment as a response against other structures of economics such as feudalism and mercantilism. At this time of history, the mercantilist ideology was based on a nation maximizing their accumulation of national treasure, category under which materials like gold and silver fell into. As for feudalism, the structure had a more medieval approach as it revolved around the relationships derived from the holding of land in exchange for manual labor services. With the appearance of liberalism, as initially analysed by Adam Smith in his incredibly influential book The Wealth of Nations, the argument provided was that the government should have minimal interference

He developed a strain to the liberalist ideology called the Keynesian theory of economics, commonly known as Keynesianism. Keynesianism believed that there is a positive role for the state to play in domestic affairs as well as international affairs. His views were mostly influenced by the problems caused by major events such as World War I and The Great Depression. Keynes’s ideas continued to be popular throughout tough periods like World War II, until the 1970s. Keynes believed that the Great Depression was evidence that the invisible hands, as labelled by Smith, sometimes stumbles in disastrous ways. Keynes once wrote “Let us clear from the ground the metaphysical or general principles upon which, from time to time, laissez-faire has been founded. It is not true that individuals possess a prescriptive “Natural liberty” in their economic activities. There is no “compact” conferring perpetual rights on those who Have or those who Acquire. The world is not so governed from above that private and social interest always coincide…. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they

Each individual state will specialize in the manufacture of those products in which it has a comparative advantage over its trading allies. This will lead to an optimal and more efficient application of resources and, henceforth, economy in production.

II. Accessibility of Domestically Produced Goods and Services:

Secondly, free trade allows each actor to get supplies which they are simply unable to produce entirely or can only manufacture inefficiently. Raw materials and commodities which are not found within their domestic market can be acquired at low prices through free movement.

III. All-Round Prosperity:

Thirdly, thanks to open trade, global output rises since efficiency, specialization, and other aspects enlarge the production scale. Countries are also able to obtain goods at a cheaper price as a result of free trade; which consequently leads to a growth in the standard of living of people throughout the world. Therefore, free trade leads to higher production, higher consumption and higher all-round international prosperity.

IV. Competitive